China’s Clean Energy Surge Leaves the World Behind
China races ahead in renewable energy and EV innovation, leaving global competitors struggling to keep up.
Editorial Team (ET)July 11, 2025
China has emerged as the global leader in energy transition, setting benchmarks that no other country has matched. Wood Mackenzie reports that the nation is on track to source half of its power from low-carbon energy sources by 2028. This transformation underlines China's commitment to renewable energy and positions it as a key player in the global push toward decarbonization.
China’s Low-Carbon Milestone
By 2028, China is expected to generate 50% of its power from renewable sources, including hydro, solar, wind, nuclear, and energy storage. This ambitious milestone reflects a combination of forward-thinking policies and strategic investments. Solar and wind energy alone will surpass coal as the dominant source of power by 2037. China’s rapid shift toward renewables is unprecedented and highlights its role as a trailblazer in sustainable energy.
The Solar and Wind Boom
China’s progress in solar and wind power installation is unmatched. According to Wood Mackenzie, by 2025, its installed capacity for these renewables will surpass that of Europe and North America combined. The growth is fueled by strategic government support, which has reduced production costs and encouraged technological advancements. This deliberate focus on renewable energy infrastructure ensures China’s long-term energy security and environmental sustainability.
Electric Vehicles: China’s Auto Revolution
China’s dominance extends beyond power generation to its burgeoning electric vehicle industry. By 2034, battery electric vehicles (BEVs) are predicted to account for two-thirds of all passenger car sales in the country. Including hybrid electric vehicles, this figure rises to 89%. The BEV market is growing at an impressive annual rate of 8%, while internal combustion engine (ICE) vehicle sales are plummeting by 11% annually. These trends underscore the country’s commitment to reshaping transportation and reducing emissions. China’s advancements in EV technology and production are not only transforming its domestic market but also creating ripple effects globally.
Trade Tensions: EU Tariffs on Chinese EVs
China’s rapid progress in the EV sector has not come without challenges. Its growing presence in the European market has led to tensions, with the European Union imposing tariffs as high as 45.3% on Chinese-built EVs. These measures are aimed at leveling the playing field for European automakers, who are struggling to compete with the cost efficiency and technological edge of Chinese manufacturers. Despite these tariffs, China’s EV makers continue to thrive, aided by government subsidies such as cheap land, low-cost lithium, and tax incentives. These subsidies enable Chinese companies to undercut their competitors even in heavily taxed markets.
China’s Domestic EV Preference
The Chinese market is also witnessing a shift in consumer behavior. Domestic brands such as BYD and Geely are gaining significant traction, outpacing foreign competitors like Tesla. Chinese consumers increasingly favor local brands due to their superior cost-to-quality ratio and advanced technological features. This trend is reshaping the market dynamics within China and solidifying the dominance of its homegrown EV industry.
Clean Energy Transition: A National Imperative
China’s energy strategy is deeply rooted in its commitment to energy security and decarbonization. Over the past five years, the country has experienced an annual power demand growth of 6%, with a projected growth rate of 5% through 2030. This surge is driven by industrial development, electrification, and high-tech manufacturing. The government’s policies are designed to support these demands while simultaneously reducing reliance on coal and fossil fuels.
Technological Advancements: The Fourth Industrial Revolution
China’s investments in renewable energy are not limited to meeting current demands. The nation is building the infrastructure required for the Fourth Industrial Revolution. Data centers, artificial intelligence, cloud computing, and cleantech industries are key drivers of this transformation. Additionally, advancements in semiconductors and battery production are bolstering China’s renewable energy capabilities, positioning it as a global leader in the digital and clean energy economies.
Challenges for Global Rivals
Western companies are feeling the pressure of China’s rapid advancements. Tesla, for instance, has faced declining sales in China, while General Motors recently announced a significant financial write-down due to challenges in its Chinese partnerships. These developments highlight the need for Western markets to adapt quickly. Without a concerted effort to prioritize renewable energy and EV sectors, they risk falling further behind.
Conclusion: China’s Global Energy Leadership
China’s leadership in the energy transition is reshaping global markets and setting a high bar for renewable energy and electric vehicles. Its rapid advancements serve as both a challenge and an opportunity for other nations to innovate and compete. With its strategic focus on sustainability and technological innovation, China is not only transforming its energy landscape but also influencing the global trajectory toward a cleaner and more sustainable future.
